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'Expat managers: a search for experienced Brits in emerging markets, "The Telegraph"

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December 17th, 2012 - London, UK - International firms have remained heavily reliant on expat managers during the economic downturn, despite the fact they cost up to five times more than locals.

The findings come from a survey of nearly 300 global and regional HR directors from international companies. Nearly two thirds of firms said the number of expat managers they employed had increased or stayed the same in the past five years.

Expat packages were worth between two and five times more than locals would have been paid - £290,000 on average, including base pay, bonus, long-term incentives and benefits such as housing and school fees.

Only 16 per cent of firms said the economic crisis had a “significant” influence over expatriate policies, while 45 per cent said it had “some” influence and 36 per cent said it had no influence at all.

He said: “Companies are moving to more exotic countries like Azerbaijan, Mongolia and Armenia. They want to grab a portion of the emerging markets and need managers who can develop local talent.”

Catherine Gervais, senior consultant at Mercer, said this demand for senior managers had prevented a “knee-jerk” reaction against foreign assignments.

However, firms were increasingly sending people abroad for less than a year and being cautious about pay, she said.

Expats were also being housed in cheaper areas instead of high-end neighbourhoods near international schools and business districts, she said, and cost of living allowances were sometimes being lowered.

Separate figures released this week by the RES Forum, a group of HR and mobility experts, found more than half of 58 firms surveyed were switching to less generous, “local-plus” packages for expats.

Andy Piacentini, head of reward at Howden Engineering and RES Forum founder, said traditional expat terms were still offered for “high-value” assignments, but most employees sent overseas were likely to receive “local terms, offered with a handful of benefits to help relocation and integration”.

The survey, seen exclusively by Telegraph Expat, found “softer” benefits being offered included cross-cultural training, support for spouses, language training and pet shipments.

Even in Middle Eastern countries such as Dubai - often seen as offering expats a luxurious lifestyle - organisations were “watering down” benefits and making bonuses a higher proportion of pay, Hay Group regional director Vijay Gandhi said. Expats still benefited from tax-free incomes, he added.